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Navigating Compliance during a Credit Card Conversion

posted by Julie Wigg, Project Services Team Lead on Wednesday, May 31, 2017

Compliance and regulations can seem like a daunting piece of the puzzle when considering converting a credit card portfolio. However, CARD Act regulations are an important piece of the planning processes for financial institutions anticipating a conversion from one credit card issuer to the next. It’s not only important for operations staff to know and apply the requirements; it’s also key for cardmember-facing employees to have a solid understanding of the rules so they can easily answer member questions.

Here are just a few examples of the regulatory requirements of which staff should be aware during a conversion:

  • Protected Balances – Any balance already on the card is protected at the prior rate until paid off. Your staff should carefully review statements following conversion to ensure protected balances are displaying accurately at the prior rate.
  • Credit Bureau Reporting – Teams must review thoroughly to ensure there are no negative impacts during the reporting shifts. Common problems to look for are double reporting of the old and new cards, inflated balances or late payments.
  • Late Fees – If there is a new payments address, late fees must be suspended on accounts for 60 days. Make sure you have clearly communicated your new payment instructions multiple times to cardholders.
  • Disclosure Requirements – Change In Terms (CIT) letters must be mailed a minimum of 45 days in advance of conversion (in some states, the required disclosure period is longer). Cardmembers usually have many questions when these arrive in the mail and this can have a significant impact on call center volumes and branch traffic.

This list only hits a few of the requirements a conversion team needs to incorporate into a conversion plan. Be sure to consult with a regulatory compliance expert before putting that plan into motion. Working with a knowledgeable team can help you understand the full scope of requirements you and your partners must consider. 

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